How clean does a Factory Restore get the computer?

Hi there. I searched through the posts on the forum and learned some information, but have not seen a specific answer to my question.
My computer is a Z60m with XP Pro.
I caught a bad virus masquerading as an anti-virus. It was terribly obvious it was bad news and I switched my internet off almost immediately. My desktop had changed to a wallpaper stating "Warning: your're in danger!' and a fake antivirus tried to run every 30 seconds.I believe it was "System Security 2009."
I tried antivirus programs and nothing would run; I could not even boot to safe mode. It gave me a blue screen instead. I deicded the best course of action  was to start over and used the ThinkVantage button to "restore factory settings."
It worked, I have new Windows XP. Updated to servicepack 2 and 3, downloaded a few antivirus programs and scanned. They all show a clean computer. I had one remnant of the "System Security 2009" virus Malwarebytes found in safe mode and fixed it.
My question is: is there any way the virus survived? Could it infect the hidden area the R&R is kept? If so, how do I find out? I am really paranoid to use any passwords until I am 100% sure I killed this thing.
Thank you for your time!

If you recover to factory condition, this should reformat the discs and reinstall all the drivers and windows, it will rewipe the hdd. 
Regards,
Jin Li
May this year, be the year of 'DO'!
I am a volunteer, and not a paid staff of Lenovo or Microsoft

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